Concerns were raised tonight that the government could demand that all major firms regulated by the Financial Services Authority abide by the new rules aimed at cracking down on pay at banks and forcing them to draw up "living wills". These will have to be produced by firms to make it less likely they would require taxpayer bailouts in the event of their collapse.

Lawyers at law firm CMS Cameron McKenna expressed fears that powers handed to the City regulator to impose rules on pay and crack down on misdemeanours could also be extended beyond the banking sector.

The financial services bill, published along with an "impact assessment" report running to almost 120 pages, is the government's attempt to rein in the banking industry as a result of the crisis that has seen collapsing institutions propped up by taxpayers. The bill also outlines plans to allow the government to demand information directly from Royal Bank of Scotland about the loans it is insuring through the asset protection scheme.

"As we feared, key provisions of the FSA's new regulatory power in areas such as remuneration, living wills and disciplinary action are not restricted to banks but apply to all authorised firms such as insurance companies," said CMS Cameron McKenna's Paul Edmondson.

Lawyers pointed out that by using the phrase "authorised persons" in the language of the bill the government was in effect widening out the FSA's remit to crack down on banks to other firms.

The Treasury insisted that government policy to date had not been to broaden the scope of the FSA's codes on pay and on living wills beyond the banking sector. A spokesman said: "It has been kept in the generic form and the FSA has no plans to bring in others but we don't necessarily want to rule it out for the future".

The FSA is currently conducting a pilot with five "systemically important" banks about how to devise living wills. While it will get powers to force firms to draw up such break-up plans it will not be handed powers to force firms to restructure their operations.